Video-On-Demand is Internet-TV Winning Formula.Panelists Debate how to do itJust when one thought the television experience couldn't possibly be enhanced anymore, VOD See video-on-demand. VoD - video on demand came on the TV scene. In a discussion with Home Choices vp Lawrence Hess Hess , Walter Rudolf 1881-1973. Swiss physiologist. He shared a 1949 Nobel Prize for his research on the brain's control of the body. and Terrence Coles, sr. vp of Intertainer (both pictured on the right), along with the front cover tete-a-tete, we discover what is on the road ahead for VOD and its relationship with Internet-TV. Lawrence Hess: Video Networks is a U.K.-based video-on-demand company founded in 1992 by Simon Hochauser, who has a Ph.D in fiber-optics technology. He's been spending years developing this system that we launched London-wide in September of 2000. We have over 10,000 customers, so it's still a limited roll-out. It's a video-on-demand system where we have over 1,000 feature films available at any time; 1,500 music videos on the service and 2,500 hours of television programming. Brian Nash Brian Nash (born May 20, 1963 in Liverpool, England) was the guitarist for 1980s pop band Frankie Goes to Hollywood. He was otherwise known as Nasher. Nash was an apprentice electrician when he formed the band Sons of Egypt with Peter Gill and Holly Johnson. : First-run, second-run? Hess: It varies. We have some old stuff and new shows as well. We have deals with three major studios and we're adding a few more in the months to come. We have television deals with various U.K. producers as well as Americans and some Australians. We look at a lot of English content for television, but for feature films it's the world. We're looking at Asian features and Hindi features, which do extremely well in the U.K. The service is available for [pound]6 [US$9] per month for a subscription package all available on-demand. For example, Drama Choice would be one subscription package. For an additional [pound]6 you can add two more packages. We currently have eight packages of genre television programming. You pay that subscription package per month. If you get all eight of the packages we currently have, it's only [pound]17 [US$26] per month. And it's true on-demand. It's delivered from the fileserver head-end, streamed to the set-top box The cable TV box that sits on "top" of the TV "set," although it is often located several feet away in an equipment rack. The set-top box descrambles the premium channels and provides a tuner for the higher cable numbers that very old TVs did not support. in the consumer's home. VideoAge: Do you provide the set-top box? Hess: Yes. VideoAge: How much does the set-top box cost? Hess: For the consumer, it is a [pound]40 [US$61] installation charge. We developed the box. The new generation box is about the size of a VHS (Video Home System) A half-inch, analog videocassette recorder (VCR) format introduced by JVC in 1976 to compete with Sony's Betamax, introduced a year earlier. cassette A removable magnetic tape storage module that contains supply and takeup reels (hubs) in the same housing. Most audio tapes and videotapes use cassettes as well as backup tape technologies such as DAT, 8mm and Magstar MP (see below). and we'll be rolling it out in a few months. VideoAge: What's the financial model with the content supplier? Do you pay them a flat fee? Hess: Yes. For the content that we put into the subscription packages, we pay a flat fee to those suppliers. Our revenue model is based on the number of subscribers we have and the number of packages we can sell. Feature films are all on a revenue-sharing basis. We have a service called Film Choice with more than 1,000 feature films which are all available from [pound]1.99 [US$3] to [pound]3.49 [US$5.35] [each]. Tracy Fullerton Tracy Fullerton (born 1965) is an American game designer, educator and writer. She is currently an Assistant Professor in the USC Interactive Media Division of the USC School of Cinematic Arts where she serves as Co-Director of the Electronic Arts Game Innovation Lab. : When is your primetime and how many people can request it? Hess: What we've done is set service centers around London and our goal is to install nine to 12 service centers around the U.K. Each one will deliver product to a certain number of tomers, so that's the way we get around the primetime situation. Each line is also a dedicated line to the customer. A millisecond One thousandth of a second. See space/time and ohnosecond. (unit) millisecond - (ms) One thousandth of a second, one thousand microseconds. A long time for a modern computer. after a customer orders a film or product, that product is available for somebody else. It's streaming; its not downloading downloading - download , so it's constantly available to the next consumer. VideoAge: It's DSL DSL in full Digital Subscriber Line Broadband digital communications connection that operates over standard copper telephone wires. It requires a DSL modem, which splits transmissions into two frequency bands: the lower frequencies for voice (ordinary and not coaxial co·ax·i·al adj. Having or mounted on a common axis. coaxial Adjective 1. Electronics (of a cable) transmitting by means of two concentric conductors separated by an insulator , right? Hess: Yes. Nash: Is it possible as a user to skip commercials? Hess: There are no commercials. And it's got full VCR VCR: see videocassette recorder. VCR in full videocassette recorder Electromechanical device that records, stores on a videotape cassette, and plays back on a TV set recorded images and sound. functionality -- fast forward, rewind re·wind tr.v. re·wound , re·wind·ing, re·winds 1. To wind again or anew. 2. To reverse the winding of (recording tape or camera film). n. 1. The act or process of rewinding. and pause. VideoAge: For security reasons, is it encrypted en·crypt tr.v. en·crypt·ed, en·crypt·ing, en·crypts 1. To put into code or cipher. 2. Computer Science ? Hess: It's not encrypted because it is a point-to-point signal. It's secured inthat each subscriber box has a unique address. So when a product is delivered to one box, there's no way it can go to somebody else without them also ordering it. Douglas Friedman: It's like e-mailing the film. Hess: Exactly. Terrence Coles: Intertainer is a VOD company based in Culver City Culver City, city (1990 pop. 38,793), Los Angeles co., S Calif., a residential suburb of Los Angeles; inc. 1917. It is a center of the U.S. motion-picture industry, whose roots in the city date to c.1915. Its chief manufactures are rubber products and computers. [CA]. Actually, we're an entertainment-on-demand company. We deliver content from the entertainment sector -- movies, music videos, television shows, games -- all kinds of digital content delivered on-demand. And we're platform-agnostic: we'll deliver content over DSL networks as well as over cable networks. VideoAge: So you have to make deals with cable operators? Coles: We make deals with cable operators and telephone companies and over-builders. WinFirst or RCN RCN n abbr (= Royal Canadian Navy) → kanadische Marine are over-builders. They lay their own fiber. Anybody delivering bandwidth to the home is a potential partner for us to work with. We've been around since 1996 and the principals of the company are Jonathan Taplin and Richard Baskin, both producers in Hollywood. The other major six investors in the company are NBC NBC in full National Broadcasting Co. Major U.S. commercial broadcasting company. It was formed in 1926 by RCA Corp., General Electric Co. (GE), and Westinghouse and was the first U.S. company to operate a broadcast network. , Intel, Comcast, Quest, Microsoft and Sony. The whole concept was to aggregate pop culture on-demand. We've done long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. deals with Warner's and Universal. We have some title-by-title deals with some other studios. We have EMI (ElectroMagnetic Interference) An electrical disturbance in a system due to natural phenomena, low-frequency waves from electromechanical devices or high-frequency waves (RFI) from chips and other electronic devices. Allowable limits are governed by the FCC. music, Warner music, in terms of long-term deals, A&E, Discovery. The service we deliver varies based on platforms. We deliver content and user interface over existing infrastructure. VideoAge: If I'm a cable subscriber and getting all the channels I want, why should I subscribe to Verb 1. subscribe to - receive or obtain regularly; "We take the Times every day" subscribe, take buy, purchase - obtain by purchase; acquire by means of a financial transaction; "The family purchased a new car"; "The conglomerate acquired a new company"; your service? Coles: You won't have to. It'll be much like pay-per-view today. In the deployments we're working on with Comcast, it's channel 601 on your cable box. Here's your VOD channel. In another deployment with Comcast, it's the VOD button on your remote. It's just like pay-per-view is on cable today. This will come with your service; it's nothing additional you have to pay for or subscribe to. It's available for you with digital cable. On your digital cable box, it's an option that is there for you. Hess: Your television product, is that available on a per-fee basis or a monthly subscription basis? Coles: Per fee, so strictly pay-per-view. VideoAge: Is it revenue-sharing with cable systems? Coles: Yes. VideoAge: So you have a three-way split: content provider, cable system and you. Coles: Yes. VideoAge: And you do your own marketing? Coles: We co-market with the cable companies. So we do marketing about our service but we'll also market and say, get Intertainer on Comcast digital cable. VideoAge: That's the only way you do branding, with the cable operators? Coles: It will be a co-branding system. And in other cases, we'll do branding with the telephone operator. So the benefit of getting DSL could be, Intertainer, other than fast e-mail or fast access to the Internet. In the DSL environment, it's an IP service, so we have our own video-server infrastructure, our own content management system, royalty management system, user interface, the whole thing is end-to-end Intertainer and we pretty much drop that in for a telephone company. VideoAge: What kind of library do you have? Coles: We have over 50,000 hours under license. We put 500 hours in the field at any given point in time. And we refresh (1) To continuously charge a device that cannot hold its content. CRTs must be refreshed, because the phosphors hold their glow for only a few milliseconds. Dynamic RAM chips require refreshing to maintain their charged bit patterns. See vertical scan frequency and redraw. that at 20 percent monthly. The idea there is the 80-20 rule. We put 20 percent of the stuff 80 percent of the people want to see out there regularly, then we refresh as we see what people buy. VideoAge: Do you pay the supplier a flat fee? Coles: We revenue share with a percentage based on the pay-per-view business as it exists today. With television content, it's a relatively new concept, to have TV on demand. So, it's still a revenue share model but there's no existing model of how you do that. So the deals vary based on who the provider is. Stephen C. Liu: Why do you only do 500 hours? Is there a cost restraint? Coles: Absolutely. The key is, if I've got to push this content out to the edge, you've got not only the bandwidth to get it all out there when you're refreshing that, then you've got storage and space restraints. VideoAge: Is the service encrypted? Coles: We encode (1) To assign a code to represent data, such as a parts code. Contrast with decode. (2) To convert from one format or signal to another. See codec and D/A converter. (3) The term is sometimes erroneously used for "encrypt. , we encrypt See encryption. , we produce it. We get a tape and we take it from that tape all the way to the fileserver for the end-user. VideoAge: And how much do you charge the consumers? Coles: The service today does nor have a fee but has a content charge. It's $3.99 for first-run movies, $2.99 for library movies, $1.99 for things like movies of the week, 99 cents for one-hour television shows, 75 cents for kids' and half-hour TV shows. VideoAge: Are you competing with cable and videocassettes? Coles: We're probably the biggest competitor with video rentals because you have this in your home, you don't have to go rent it, there're no late charges, there's full VCR functionality. And you have 24-hour license to watch it as many times as you want. But it's streaming, so you don't ever download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. anything to your machine. Hess: Is it encoded MPEG-1 or MPEG-2? Coles: Actually, MPEG-4, for the IP. We're using Windows Media Microsoft's audio and video framework for Windows, which embraces playback, encoding and streaming. Windows Media Player is the digital jukebox and media player that comes with every version of Windows. 7 and we're doing stuff with Windows Media 8 on the MPEG-4 side. And cable is MPEG-2. VideoAge: And what kind of speed does it go out with? Coles: Cable MPEG-2 is 375 Kbps. VideoAge: And the bandwidth of the pipe? Coles: For MPEG-4 we're encoding See encode. at 500 Kbps and 750 Kbps, so the consumer today needs between 640 Kbps and 1 Megabit per second A megabit per second (abbreviated as Mbit/s, Mbps, or mbps) is a unit of data transfer rate equal to 1,000,000 bits per second. Because there are 8 bits in a byte, a transfer speed of 8 megabits per second (8 Mbps) is equivalent to 1,000,000 bytes . Using Windows Media 8 we can encode at 500 Kbps and get good quality, but we're in the field with Windows Media 7 at 750 Kbps. The 500 Kbps would require 640 bandwidth to the consumer. We're always pushing down the amount of bandwidth necessary, while keeping the quality as high as possible. You'll get to a place where you'll have very acceptable 500 Kbps video and possibly lower. We've seen stuff as low as 300 Kbps but I'm not willing to say that 300 Kbps at 30 frames per second full-screen video is where we want it to be. But again, we're looking at the home-video experience that the consumer is going to pay $3.99 for. Liu: Is the challenge on the supply side, convincing studios and content owners to put their stuff up with the revenue share, or is it still more so on the buying side? Coles: The challenge is on the distribution side. The suppliers are more than willing to play but it's how many servers can you deliver to me tomorrow? So it's all about who's going to roll out the bandwidth. Nash: What about Satellite? Coles: We were talking about that. Satellite today does not have the back channel necessary for streaming. You can push the signal down but the back channel is not there for the kind of streaming we do. You could do a combination of satellite and DSL but today, satellite for true video-on-demand is not a solution. It's the rollout. VideoAge: How many users do you have, on average? Coles: There are about 2,500 users in Cincinnati. We're looking to expand that market in the next two to three months. We'll have six markets going up with Quest between now and summer and we also have a couple of markets going up with Comcast digital cable in the next few months. Our numbers will begin to ramp to the tens of thousands by the end of this year [but] it's all about the cable and telephone companies...if they accelerate, if digital cable were to roll out widely, we could get a whole market of digital cable. VideoAge: What will the consumer prefer, cable or DSL? Coles: The consumers [don't] understand that there's going to be a competition [between] digital cable and DSL. The telephone companies have not come out and said: "We're going after the video business." In the trades, we all understand that DSL is going to enable the telephone company to compete with the cable company. But consumers have no idea. Fullerton: Digital cable is being sold as having better picture quality and more channels. Coles: DSL today has a lot more momentum based on people wanting a fast Internet connection, so DSL is getting a wider distribution. But it only takes the digital cable systems to get out there and upgrade their plans and start offering boxes to consumers and saying: "Look, we're just upgrading. Here's your new box. Your new cable plan now costs you $50 instead of $30." And they could surpass DSL from a deployment standpoint The Standpoint is a newspaper published in the British Virgin Islands. It was originally published under the name Pennysaver, largely as a shopping-coupon promotional newspaper, but since emerged as one of the most influential sources of journalism in the . Then you look at DSL set-top boxes that I think are going to be way more functional than the low-end digital cable set-top boxes, which then I believe will give DSL the leg up. So it's going to be a little game of leapfrog for a while and then consumers will ultimately decide: whoever delivers the better product will get the win from the consumers. VideoAge: Which is more expensive, DSL or cable? Coles: Internally speaking, it makes no difference. It's just what kind of a deal we can cut. The cable companies are a little more controlling of their networks. The business that we have is a complete end-to-end solution (jargon) end-to-end solution - (E2ES) A term that suggests that the supplier of an application program or system will provide all the hardware and/or software components and resouces to meet the customer's requirement and no other supplier need be involved. Compare: turn-key solution. in an IP environment. In a cable world I have to go through whatever server they say they are going to use...whatever box they are gong gong, percussion instrument consisting of a disk, usually with upturned edges, 3 ft (91 cm) or more in diameter in the modern orchestra, often made of bronze, and struck with a felt- or leather-covered mallet or drumstick. to use. The cable company has a tighter hold on the delivery system than the telephone company does. But the cost structure is still borne by them with the network. |
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